Unlike the hard Y2K wall, we knew SAP's 2025 Business Suite 7 wall was a soft one. They have just pushed it back till the end of 2027 followed by optional (and more expensive) extended maintenance until the end of 2030.
The good news - glad they made the announcement early in this decade, not wait a few more years and keep customers anxious. Also for many of its complex, global customers there is more of a runway to migrate to S/4HANA or competing ERP products.
The bad news - Even in 2020, the legacy product is a recruiting liability for attracting younger tech talent. Given all the customizations around it at most customers, it will be even more of security and compliance risk in 2025, and even more so in 2027 and 2030. It will not magically be able to support multi-tenancy, machine learning, IoT, other innovations any time soon.
What customers should do - if you are already on the way to S/4HANA. pretend the announcement did not happen. If you were on the fence, take a harder look at third party maintenance, but seriously take a hard look at S/4HANA now, not wait
What SAP should do - take the maintenance revenues from the old product for the next few years and invest 100% in expanding S/4HANA functionality. The biggest payback for S/4HANA that customers report comes from retiring previous customizations. That is a pretty weak ROI justification. They should get payback from contemporary features, particularly industry specific ones. SAP should significantly accelerate investment there. Similarly, invest much more in automating moves to S/4 and helping customers with public cloud migrations. Challenge SI partners to invest in automation, multi-tenancy, virtual delivery, and cut back on labor intensity, inconsistent project quality and heavy travel model.
Honestly, the worst thing that can come out of this is if SAP is lulled by the extended maintenance revenue stream. The second worst thing would be if SI partners continue to party like it is 1999.
